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Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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01:00:00

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Tyler 12, U.s. 10, Macy 9, Washington 8, Us 7, Italy 6, Virginia 5, Newport 5, Jamie Dimon 5, Ben Bernanke 4, Martha Stewart 4, Europe 4, Obama 4, Detroit 3, Chicago 3, Mr. Bernanke 3, John Harwood 3, Melissa Mayer 3, Josh Lipton 3, Phil 2,
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  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    February 26, 2013
    1:00 - 2:00pm EST  

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it is time for final trades. go terranova. >> lqd investment grade etf. >> mr. murphy. >> titan international. stock in the news when sent a letter to french government, down 16% today. buy. >> steven. >> rio on the short side. big run, now you want short. >> virtual doctor. >> michael kors. moonboy 9 and question on twitter, i like it unusual call buying. that does it for us today. fast money tonight. dow up 100. "power lunch" picks up that story right now.
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down yesterday, up today, and breaking news on the east coast at 1:00 p.m. wall street and investors everywhere are parsing the testimony from the fed chief ben bernanke. as you see dow industrials up .75, 13886 and change. sue and bob at the stock exchange. we start with senior economics reporter steve liesman. steve. >> reporter: thanks very much, tyler. fed chairman offering an expected defense of easing. market committee concerned about the cost of more qe and rates as he was to the senators. the fed chairman essentially saying although there's a long period of low rates, could incur excessive risks, he's concerned the cost is outweighed by the benefits from a stronger economic recovery. bernanke also had a sparp exchange with republican senator from tennessee bob corker on the issue of whether the fed is too close to the banks it regulates
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and whether paying interest on reserve is a massive bank subsidy. >> getting ready in the last few years, as you've alluded to, when interest rates rise, to basically have to print money to sell securities at losses and then pay interest on reserves which people pointed out, and i think you've talked about, is going to be billions and billions of dollars going to institutions. again, you regulate. do you concern yourself at all with the fed being viewed as not as independent as it used to be and working so closely with many of those institutions you regulate. >> well, we're concerned about per acceptings that's true, but none of the things you've said are accurate. for example. >> yes, they are. >> bernanke went on to argue that the interest rate on reserves would be 8 market rate not a subsidy to the banks. a back and forth with the
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democratic senator elizabeth warren on the issue of too big to fail. she argued the government needs to do more to solve the problem and suggested the government recoup from the banks the subsidy they receive in lower interest rates because the mark thinks it will bail them out. bernanke rejected the idea. he said he could envision an exit strategy from the current policy where the fed doesn't sell assets but let's the balance sheet unwind by naturally running off. he urged strongly not to let the sequester go full force, should encourage more cuts in the future because the economy now is fragile. sue. >> steve, thank you so much. a strong day on wall street, up 110 points, rebounding from the late day selloff we saw yesterday where we saw 154 points in the last hour of trading alone. bob pisani joins me right now. a lot of people thought that selloff would continue because of the velocity in the last hour.
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>> bears not in control yet. very important thing, they put up big sectors here. we're having very heavy volume today. one of the complaints about the rally we've seen, rallies tend to be on shallow or light volume. it's true we had very heavy volume on the selloff. today on the rebound we're also seeing heavy volume. 2 billion shares have changed hands, total volume in all stocks. halftime, that's 4 billion, what we did yesterday. spider, triple qs, small cap russell, all heavy volume. risk on what you would think, materials, industrials, all to the upside. energy stocks all on the market leerps. health care, we're going to get breaking news here. i think rick has got something now. >> on the bond auction because we have a five-year note auction in chicago. yesterday yoy you weren't all t happy with demand. what did today look like? >> well, today you couldn't get a more by the numbers auction. you'll see what i mean. the yield, think las vegas. 7s are wild.
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.777. right in the middle of wi bid offer priced exactly where it was trading. if you look at the bid to cover at 2.85, that is the 10 auction average. you look at indirects at 41.87, those are the 10 auction averages. if you look at directs to 14.3, just a whisker above the 1310 average. it's averaged every way you look at it, but the pricing was tight. we give it a b minus, much better than yesterday's auction in certain ways. but yesterday -- let's put it this way. the longer maturity at this point may be the most interest, except for the fact that the market has already rallied yesterday taking away any concession the market may have offered. back to you. >> thank you very much. bob, finish up your thoughts. >> put up health care costs sequestration having an effect.
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health care down. concerns about medicare cut from the sequester. i want to know the leadership on the upside, we had a fabulous home building number. >> yes we do. >> great numbers for buildings sales. >> way above strimts. >> housing stocks are responding. biggest gain in two decades for new home sales. >> does it hold or do they revise it? >> these numbers can get revised. the numbers have been moving sequentially. i look at the smoothout numbers and they have been moving higher for almost two years now. >> kenny, come on in and join the conversation. what do you make of the bounceback we're seeing today. >> exactly that. just a little bit of a knee-jerk reaction bounceback. we've been together with 1490, a significant level. we closed below, just above it all day. it's going to be interesting to see if we stayed there and close above it as the day moves on. it will give the sense of a foundation. as the market moves to the 1510 range you should take advantage. once again one more down leg. i wouldn't be surprised if it
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takes us to 1460. >> why so much buying today, that's what interests me. where would you get a rebound with heavy volume like today. >> especially after yesterday's volume to the downside. >> i think yesterday a little bit people thought after they thought about maybe it was a little bit of an overreaction. i think sequester in front of us will cause nervousness. i wouldn't take that as a real negative but an opportunity as the market once again tests lower. >> bears are not in control. >> they are not. >> that's the point about volume i'm trying to make. it's not simply we flipped a switch and we're going in the other direction. >> no. but we did see yesterday and down days there was heavy volume on down days, too, which suggests distribution. people getting a little more negative which leads me to believe maybe -- >> given the run we've had in this market, adopt we actually for the longer-term investor, as you point out, need a 5% correction. >> i would absolutely agree. i think we're going to get it and i think people should be
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prepared for that to come and take advantage of it. >> so far not coming. >> we thought it was coming. >> then you get ben bernanke giving testimony today, telling how much he continues to support the market. the economy is still weak. he's going to sit there and support. therefore you don't get it. >> bernanke was very spirited in his defense. worry about asset bubbles, he said i don't see any signs of an asset bubble. >> until he does. >> then we'll all know. thanks, guys. see you in a little bit. ty, up to you. >> jpmorgan holding an investor day in new york city today. shares are down. they are up almost 8% so far this year, down a half percent today. kayla tausche covering auction across the river in new york city. kayla. >> hey, tyler, well, jamie dimon in the hot seat. remember last week some shareholders called for that role to be split. we haven't heard from him on that point yet. we have heard about management
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change. lots of turnover, half the executives presenting today were in different roles last year. he begs to differ say too much change saying a lot are jpmorgan vets. the big news on cost cuts. that's why a lot of people looking at the stock down today. the bank is targeting $1 billion in cost cuts. among the ways they are going to get there, 4,000 net head count reductions. we should note they are going to be a lot of head count reductions over the next two years in the consumer banking unit. there could be as many as 19,000 jobs cut with the majority of those in the mortgage banking department as the mortgage environment improves here. that's not to say the consumer bank is shrinking. we heard from chase consumer banking ceo or retail banking ceo and he said they will open 200 branches on average in the next two years. we did also hear a lot about washington today. cfo said regulatory challenges remain number one priority. the number one challenge, really, for the bank at this time. ceo of commercial banking echoed
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that theme. seems to be a theme throughout the day. d.c. policies holding back a tremendous amount of liquidity in the market, in the market except for in commercial real estate. interestingly saying on the commercial side new york, san francisco, d.c. is extremely frothy with a lot of competition and banks starting to lower standards across the street. tyler and sue, back to you. >> very interesting, kayla. thank you so much. we heard about big housing numbers today. it's reflected in home depot, which is experiencing its best day in six months, up 5 2/3%. better tied to housing sales and hurricane sandy. raised and at 39 a share. $17 million buyback. looking ahead it sees fiscal
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growth of $17 billion. just a little less than what wall street was expecting. macy's and saks beating estimates on higher revenue. they said sales were expected to rise in the coming years as well as they invest in online technology. taking a look at two key retailers, up macy's and saks up three-quarters percent. ty. >> sue, popular survey. how big of a mess is italy. what does it mean for europe and the u.s.? a shift in u.s. energy policy. we were trying to lessen middle eastern imports but something just changed. we'll be back to tackle those topics when "power lunch" returns in 2:00. [ male announcer ] any technology not moving forward
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major snowstorm slamming into the middle west this. video comes from kansas city. they were hit very hard there just a week or so after another storm walloped them. tens of thousands of people lost power in that area. in some parts of the middle west measuring sticks show three feet of snow has fallen. sue, in this digital age we still use measuring sticks. >> it's amazing, isn't it, ty?
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they have had a lot of snow. it's going to take a while to dig out of that. meantime italian business leaders are in shock at the election results which could cause a political stalemate which in terms could affect much needed economic reforms. italian exchange down another 4% in today's trading session. michelle caruso-cabrera is covering the story for us and she's live in rome. michelle. >> reporter: deep confusion here in italy, sue. it's led to deep uncertainty in the financial markets across europe. the outcome of the elections were so inconclusive, not a single party got enough votes in order to control a majority and get anything done. this is a problem not just for italy but for all of the continent because now the leadership in brussels and european union has to wonder as they watch more and more populations reject all of the methods they think need to be implemented in order to change the economies of europe, whether or not they are going to be able
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to get anything done. additionally what's happened is interest rates of problematic companies have started to rise dramatically based on what's happened in italy. italian interest rates raised sharply yesterday and today. this is a problem because italy has so much debt. the country hasn't grown since the mid 1990s. their debt is going up. their revenue is not. their tax revenue is climbing. it's raised questions about whether they are going to be able to pay it back. also a problem in spain as well, the other troubled economy in the region, sharply troubled. slightly different set of problems. however, their interest rates have started to rise as well. this has become an issue that even ben bernanke when testifying in front of congress today was asked about what the situation was in italy. it was clear he had taken a good hard look at what happened there. he knew about the positions of various candidates. he also said while there's some definitive exposure for american banks, in the end he doesn't think it would cause a systemic
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issue for the united states. but it certainly raised a lot of questions. guys, back to you. >> michelle, thank you very much. well, the u.s. was supposed to be getting off of middle eastern oil. right? not so fast. we'll talk about that coming up. detroit has been patting itself on the back over the recovery. they may need to take a break. phil lebeau with just released news. hello, phil. >> not a big day for big three. latest rankings coming out from consumer reports. in a word, ouch if you're in detroit looking at some of the models ranked. we'll look at the models ranking and bad news with the big three when "power lunch" returns. ♪ ♪
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welcome back to "power lunch." i'm josh lipton. investors betting that caesar's entertainment may be worth a bet here. the stock popping near the highs of the session. the casino company reporting lower fourth quarter revenue impacted by property closures due to superstorm sandy. credit suisse which rates, raises target price from 12 to 11. tyler, back to you. >> josh, thank you. the u.s. may be producing more oil today than ever before. u.s. oil imports from the middle east continue to rise in 2012. this according to a financial times report out this morning. through the end of november, the u.s. imported more than 450 million barrels of crude from saudi arabia for the year. that accounted for more than 15% of total u.s. oil imports for
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the first time in a decade. the persian gulf as a whole made up more than 25% of total imports. that was a nine-year high. now, these annual figures will be released by the energy department later this week. that report in the ft today. take a look how crude is trading, down $0.67 at 92.44. forget all the recent hoopla about a comeback for u.s. automakers, forget some of it at least. less than an hour ago consumer reports released its annual list of where it ranks top models and brands. lo and behold this year there are no american cars in the top ten on quality rankings. phil lebeau in chicago with the sobering news for the big three. phil. >> this is a case where reliability is slipping and foreign domination rising in trms of the models. take a look at the top five brands according to consumer reports this year.
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lexus number one followed by sub are you, mazda, toyota, acura. essentially what you're looking at is japanese domination according to consumer reports. what stands out in the report today on the top models, honda. top mid-sized sedan was the honda accord. last year they had zero models in the top ten. this year they have three of them. they lead the pack. the bad news for big three, zero models in the top ten. that is the first time since 2007 that consumer reports has not listed a single model made by a detroit automaker amongst its top ten. the reason, according to consumer reports, slipping quality. >> when you look at the big three, they are really having a problem in terms of reliability. a lot of their new models, they are performing better. getting the reliability is going to take a couple of years for the big three to get their act together. >> how bad is it for the big three? look at the bottom five. the worst five brands, according
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to consumer reports, dodge being the worst followed by jeep, lincoln, ford, and chrysler. tyler and sue, the problem for the big three is they are ramping up production. when you ramp up production you want to make sure the launch of new models goes smoothly. that has not been the case over the last year. many are worried because we're going to see a huge increase in the number of new models. that's when you see quality often slip. that's what the problem is for the big three according to consumer reports. >> aid question about some of those japanese marks like lexus and toyota who themselves have had very high-profile slip and falls, let's say, over the past few years. so they have overcome those or what? >> they have overcome them. also, when they are redesigning a model, they are not doing everything. that's what the big three are doing now. they are doing the engine, they are doing the body, they are doing the telecom, the electronics inside. they have got so many balls they are juggling at one time, according to consumer reports, they are letting things slip.
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you compare that with the japanese, when they are redesigning a model, tyler, they are going to do a good portion of the car but keeping certain things that work right there. >> much more incremental than what u.s. automaker is doing. thanks, phil. sue. >> let's go to josh. he's got a market flash for us. >> check out tyson food down hard today, the worst performer in the s&p. here is the news, tyson saying the current quarter has been more challenging. margin precious in beef and pork segments. tyson did say it's still upbeat about full year results. investors are bailing tyson foods in the red. josh, back to you. >> thank you very much. we're going to look in on president obama in newport news, virginia. a big shipbuilding and military site down there in norfolk, chesapeake bay area. when we come back, talking about big federal budget cuts among other things will affect defense scheduled to kick in on friday. john harwood is monitoring this
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and will join us after a quick break. we will take you there to newport news when "power lunch" returns. meantime, ty, gold is getting a big boost, gold up $28, all due to the fed chairman mr. bernanke. we'll have the closing numbers for you. then what happens when things get personal in business. macy's head and martha stewart were friends before martha hooked up with jcpenney. they are not friends anymore. [ whirring ] [ creaking ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance. the next level of innovation. the next rx. the f sport. this is the pursuit of perfection.
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welcome back to "power lunch." bob pisani is with me right here on the floor again. i'm really kbefd with the market's staying power. we were up triple digits, pulled back a little but holding on. >> bears not in the narrative, the important point here. the volume heavy yesterday on the downside. it's equally heavy on the upside. this is a complaint about the market. upside volume not there. definitely is today. take a look at sectors. actually look at the spiders,
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dow, outperforming the rest of the market. home depot is helping there because of its unexpected earnings. there's the spdr, triple qs. that turned negative. iwm, russell 2000 and eem. nice housing index, up 2%. health care is the weak link but now turned positive. there's concerns about the sequester and effects on the medicare stocks, particularly certain hmos. retailers, pretty good day. a lot thought it was a ho hum christmas. not bad, steve madden, macy's full year guidance above expectation. even home depot which provided disappointing full year, quarter numbers well above expectations and part due to sandy. >> they are punishing steve madden today. >> their guidance was pretty
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good overall. >> very positive. >> these stocks have a nice run-up at certain points. sometimes take profits on individual daily movements. >> all right. thank you, bob. back to chicago and rick santelli. ricky, over to you. >> you know, we had a five-year note auction. if you look at an intraday chart you can see we're highly on change. we closed at 76 basis points yesterday, we're at 575. we still have 29 billion seven years to go tomorrow. two-day of tens, says it all. a lot of times with issues like europe, if they are important they stay in the marketplace. the fact a two-day chart is in a new range really defines that thinking. if you open the chart up, you can see last time yields were down here, talking january 24th. dollar index. let's open this chart up to august 1st. we're trading at the best levels since august in the dollar index, once again up today even
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though the yen is having another good upday because the dollar index is very eurocentric. the euro, look at the next chart. euro definitely under pressure. it is now down on the year and hovering about where it was friday afternoon before the big rally which didn't last very long. sue, back to you. >> thank you, rick, very much. all right. we told you a big gain in the gold market. metals market set to close. sharon epson tracking the action over at the nymex, a lot thanks to mr. bernanke, sharon. >> music to the ear of gold bugs if they listened to mr. bernanke, outweighs a potential risk of the policy. they listened to every word he said. we could see gold prices ticking higher. above the 1610 level. some traders say that is a level gold needed to close above to see more momentum on the upside. there are others not so sure.
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goldman sachs slashed its price forecast for gold from 2013, 1810 to $1600 an ounce. they note gold had a big slide in february, more than $100. they talk about the fact real interest rates creeping up in the u.s. as a reason for gold prices to be lower than originally thought. if it happens, an end of the 12-year bull run for gold. looking at the other metals to see how mr. bernanke's comments played out. helpful silver market, helpful to the copper market. platinum and palladium not reacting to qe commentary so lower on the session. tyler, back to you. >> sharon, now to josh lipton with whiter than white market flash. >> here is a name popping today. clorox is the only company in the s&p trading at a new 52-week high. hit an all time high. chloro up 14%. tradings around 19 times
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earnings and offers a 3% dividend yield. tyler. >> busy day at washington and washington as markets brace for those budget cuts that are going to kick in. insight from ben white, chief economic correspondent from "politico" and author of morning money column. read it every day. thanks for being with us. >> thanks for having me. >> the president down in newport news talking about the devastation visited on military, ship builders, middle class from automatic spending cuts that kick in on friday. is this over done? do we need to be as worried as washington would have us be? >> it's not just washington would have us be but obama and democrats. republicans say this is a hype job. he's trying to freak people out in order to get them to agree to a tax increase as part of a deal to get away from the spending cuts, the sequester, terrible word we call it. the big question is what actually happens after march 1. i think we do get sequester cuts in effect. no indication the deal will come
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out of washington, both sides set. is there a big impact, do markets react, longer lines at airports, food inspectors showing up, layoff in the military. if that happens, a lot more pressure between now and the end of march to get a deal. does that end the sequester maybe it does. >> end of march, continuing resolution, washington speak, that authorizes payments to fund the government kicks in. so is there the likelihood here that we'll get those spending cuts on friday, that they begin. then as some solution to the continuing resolution issue, some of those cuts get restored, et cetera, et cetera, the worst of it is avoided. i've got fleets this weekend, am i going to be waiting april long line? >> good chance you will be eventually. take a while for stuff to ramp up. administration says that won't happen. the question on whether the sequester cuts get rolled back does depend on the impacts starting march 1. right now talking about a continuing resolution, continuing funding government, wouldn't shut it down.
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nobody wants that, republicans, democrats. no indication the sequester comes out as a result of the deal. the administration says to do that we need revenue, kerry interest for private executive and oil and gas tax incentives. a number of things they want to do, republicans say absolutely not. you got your tax increase, we're not going to do it. >> lindsey graham said i would go along with revenue increases if it was part of a couple things. one, a broader tax reform. two, a serious effort on the part of the other party to grapple with entitlements. >> interesting he said he would accept the $600 billion in revenue that the administration wants. the problem with that is, it's interesting lindsey graham says it. he's got a lot of defense people in the state, doesn't want defense cuts. he would move a little bit. in order to do that, big changes in social security, medicare, a lot of changes. change in retirement, change in the way we calculate social security benefits, none of the things democrats are willing to do. sort of pie in the sky to say
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revenue increases in return for demands. >> quick final thought. did you hear anything out of bernanke this morning? i don't know going in how much you were able to listen to it, that changed the spin on the ball? >> not really. rewarned congress we don't want to have these austerity cuts immediately, bad for economic recovery. wasn't sounding alarm bells to move voices. he didn't say we're going into recession if you let this sequester hit. doesn't move the ball. we know where he sits. >> small term cuts now -- >> he didn't move the needle. >> thank you. >> gentlemen, let's recap other big stories. amc networks plummeting, its fourth quarter earnings fell 48% on the higher cost and temporary blackout of channels by the dish network. different story for cracker barrel old country store. it's second quarter income
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jumped 37%. the restaurant raised its earnings guidance for the year. best buy has cut 400 jobs at richfield, minnesota, red quarters, part of overall reduction plan announced in november. best buy reports its fourth quarter earnings on thursday. well, they say business isn't personal. in a few recent deals, personal is what it's all about. from macy's and martha to icahn. take you inside those spats. at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello?
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welcome back to "power lunch." i'm josh lipton. check out home depot in the green. the home improvement chain reporting a higher quarterly profit and improving housing market. sales tied to superstorm sandy among reasons. home depot besting lows for 15 quarters. back to you guys. >> thanks, josh. we know people are saving less money. some parents are dipping into retirement funds to pay for soaring college tuition bills. sharon epperson has a new study on how america plans to pay for college. >> this new study that just came out there from sally may shows more families saving for retirement than education. the issue is many families plan to use retirement money to pay college expenses. about half parents surveyed by sally said they are focused on college savings. 60% are focused on retirement
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savings. if they have to choose, 42% say they aren't saving for college but they are saving for retirement. the majority, 78%, are saving for both. nearly one in five parents actually say they are using their retirement nest egg to save for college. one-third already planned to use it for college funds. two-thirds say they will use this retirement money if it is necessary. >> they are putting their savings in these general savings vehicles like checking accounts and savings accounts and not really dedicating it to education related funds that could actually work for them. >> here is the rub. if you take money out of your 401(k) or your i.r.a. to pay for college, you're actually with drawing this money and that creates a taxable event. this is now taxable income. you add to that the fact that this additional income could jeopardize eligibility for financial aid and it's a double whammy for using these retirement funds.
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of course not to mention the fact that you are depleting your retirement savings and jeopardizing your financial future. >> that money is not building for your retirement, which is why you put it there in the first place. >> exactly. >> sharon, thanks. >> sure. >> president obama as we've been mentioning in newport news today, virginia. a warning of the economic consequences if there's no agreement with congress on those government spending cuts. the deadline, as you probably know, is friday march 1. chief washington correspondent john harwood is monitoring the president's remarks. john. >> tyler, what we've got is the president continuing his campaign that's gone on for a couple of weeks now with increasingly pointed rhetoric and language warning about the impacts of sequester to call on republicans to give up their resistance to tax increases as part of a solution to set aside those budget cuts. today he's in newport news, virginia, a shipbuilding company warning people their jobs might be at risk because of this and saying that virginia, which is a
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state where we expect that some 70,000 defense workers will be furloughed by some extent or another and various maintenance projects are going to be deferred. he's trying to get republican members of congress, one of whom is traveling with him, to put pressure on leaders in congress. i think we've got a bite from the president warning about effects. let's take a listen. >> over the norfolk naval station, the threat of these cuts has already forced the navy to cancel the deployment or delay the repair of certain aircraft carriers. one that's currently being built might not get finished. another carrier might not get started at all. that hurts your bottom line. that hurts this community. >> so what you've got there, tyler, is an attempt to really bring it home in a very pointed and direct way. virginia, of course, is a historically red state that lately obama has done very well
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in. he's trying to sustain that progress and hit many republicans where it hurts, which is their defense industry constituents. >> let's talk about nbc "wall street journal" poll that comes out this evening. as you often do, john, you have an appetizer version for us. >> we do have an appetizer, finger food from the poll. that shows the president has got the high ground by comparison to the republican party in trying to make the case that he is seeking compromise. when we ask people in our poll, is president obama taking a unifying approach to bring the country together or a partisan approach that doesn't do that, by 48 to 43% you see president obama is taking a unifying approach. not overwhelming but in positive territory. look at the number for republicans. it is very lopsided in the opposite direction. by 22% to 64%, with 64 being republicans are taking the approach that is more partisan and doesn't unite the country.
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only 22% say they are trying to bring the country together. the president has got a bigger mega phone. he's using it to try to put heat on republicans. we're going to see over the next several weeks when the sequester takes effect and weeks after that whether or not that's enough to ultimately push republicans back to the table on the issue of taxes. then, of course, for a big deal, democrats are going to have to give on entitlements. >> really amazing numbers. john harwood, thank you very much. there's a saying never mix business with pleasure. when you mix business with pleasure, pleasure becomes all business and pleasure goes away. we have seen this in the spat between the billionaire investor carl icahn and ackman on cnbc. the court battle macy's and jcpenney over martha stewart and her brand. here with all the juicy details, take us through the icahn ackman
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thing. >> i called up and said, maybe we can be friends now. i think we have that quote on the wall there. then ackman said, you know, i never wanted to be your friend. icahn said i never asked to be your friend. the ego, friendships resurfaced with martha stewart where terry lund greene said, i thought you were my friend, martha. you were friends with my wife. againw martha stewart it's even more complex because she is the company. so it's hard not to get personal with martha stewart living company, because she is the company. >> friendships and business sometimes don't mix. you've been following this jcpenney macy's thing and terry lungren and his wife were friends of martha's. i guess they are not going to be eating off martha's flatware. >> as a matter of fact during court, said after martha called
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me up and she told me fyi, i'm going to announce this partnership with jcpenney. i was disgusted, hung up on her. i don't plan to be friends with her. got very emotional in the courtroom. still hasn't spoken to her. that line is important to macy's. what happens there with the business. we know what happens to the friendship. >> going way back. guys who can be very good friends, creative partners, sometimes money comes between and the disputes get really, really ugly. >> an adviser to the wealthy once told me when you get to a certain level of wealth, these fights are not about the money. it's about the personalities. i think that's true here. >> thanks very much. sue. ty, recall yesterday we told you yahoo!'s melissa mayer plans to ban telecommuting. billionaire richard branson says she has it all wrong. which one is right? that's coming up in today's power rundown.
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all right. coming up on "street signs," a retail palooza, macy's popping, reports best buy is cutting jobs. so much to sift through for an investor. they will do the work at 2:00 p.m. eastern time. also the music industry is, despite the digital revolution alive and well. you have more choice than ever before. they will look at 2:00 p.m. on who wins and who loses. rich russians using rubles
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to buy american properties. we talked to the man who facilitates that along with mr. robert frankie who you just saw a few minutes ago. let's head to the nasdaq. seema mody is following the big movers. >> take a look at nasdaq. off the big lows. the cautious tone used by ben bernanke pushes investors to use this risk offer approach to trading, the reason tech is underperforming. take a look at apple. the stock up on the day. it has been trading well below it's 50-day moving average. october 5th, that was the last time it was above that level. overall, though, a mixed picture when looking at large cap tech. google shares down a fraction on the day. a couple of winners to take note of. intel seen as a defensive tech name trading higher on the day. sandisk getting an update. analyst writes better gross margin profile and additional earnings ability for san disk.
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also look at vivas, worst after reporting disappointing earnings. investors use that risk off approach. back to you, sue. >> thanks, seema. silicon valley in the midst of a business building frenzy. is this at a sign we're at the top and in for a downturn. cnbc is there with the details on that. that's how it goes in the past, jon. >> headquarters, new buildings, not always the most auspicious sign. some believe it's a curse, stock prices go south when there's a new edifice. a few buildings out here. this is a rendering for a new google headquarters in mountainview. you can see open space is a big theme here. they are working for buildings for samsung.
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you can see here, san jose, open space another big theme. collaboration something they want to encourage. you can see the way they have got this planned. lots of open spaces inside. kind of an open space and courtyard where people can walk around and talk and what not. commercial real estate is tight in silicon valley. according to data, a 7.7% vacancy rate on the peninsula pt that's where facebook, google, any others. that's down from last year with overall asking prices up 21%. tyler. >> jon fortt. thank you very much. don't miss a special power enhanced edition of "power lunch" tomorrow. we're going to hear from reality tv king mark burnett on latest venture and priceline ceo boyd on his company's earnings and outlook. now, should jamie dimon give up his chairmanship and taking on melissa mayer's decision banning employees from working at home.
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who has it right? in the power rundown next.
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but i am your rmarket data. i know what you're looking for. i'm not chained to your desk anymore. i'm faster and smarter now. and so much less expensive. i am your market data. and if i do say so myself, i have never looked better. superderivatives introduces dgx. data done differently. >> jane wells is telecommuting poolside from her backyard in sunny california. that is a new spin on working at home. we'll get to that in a minute. first let's tackle jpmorgan
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controversy at its investor day. several pension funds calling for jamie dimon to give up his chairmanship and concentrate on being ceo. what do you think? >> you know what, i'm a fan of jamie dimon and he's done a good job. you let $6 billion go by owner your watch, i'm in favor of splitting the jobs. keeping them together means more risk. i'd like to see them split. >> jane, go ahead. >> i don't know. you know, i'm sure 4,000 people that lose their jobs would like to see him lose both positions. is he ruining the company i don't know about. would an independent chairman stop that. i don't think so. jpmorgan outperforming pierce for the better part of the month. >> what does your dog think on this, jane? >> princess, jpmorgan, jamie dimon, up or down? >> richard branson. >> just said yes, keep them both. >> wagging his tail. richard branson disagree with
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melissa mayer's telecommuting. jane, i wonder what you think working from home? >> well, you know, i have actually been trying to work from home this morning and i haven't gotten a lot done. that's what i basically do at the office, too. so i would say while this is fantastic, it would take a little practice for me to become productive at it. i don't know. there's too many distractions. >> depends on the company, depends on the role, cindy. i've got no problem with it as a concept. i see where you lose some of the carbonation when working at home. >> look, tyler, i'm not trying to say i'm more productive than jane or the quality of my work is superior because i'm in the office, i think once in a while it's not a bad idea. i'm jealous of her today. >> mark zuckerberg's facebook gives employees $4,000, baby cash when they have a child. it's not to pay for daycare or
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anything like it, just $4,000. moral boosting move or unfair to workers who aren't parents. jane? >> look, notice there's nothing in that perk handbook about working from home. this you could say is not anti-yahoo!. there's a whole bunch of perks in there. if you want to attract and retain topnotch people, that's how you do it with all these freebies. it's great. you'll never leave. you may want to start your startup in facebook. the other side, futures a cadillac clan like this, you better be a top performer to keep that job. >> quick final thoughts. >> writes the credit for people with cats, i'm wondering. no. i think perks are good to encourage people. i think they need to be more tied to performance. in this case i'm happy for a family credit. >> watch these perks melt away the longer that company facebook is a public company that has to answer to shareholders outside of the family of facebook. folks, thank you very much. sue, down to you. we've got news on cwh right
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next to me on the floor. we'll update that for you. ♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.